Real-World Economics Review

from Lars Syll Mainstream economics nowadays usually assumes that agents that have to make choices under conditions of uncertainty behave according to Bayesian rules, axiomatized by Ramsey (1931) and Savage (1954) — that is, they maximize expected utility with respect to some subjective probability measure that is continually updated according to Bayes theorem. If not, they are supposed to be irrational, and ultimately – via some “Dutch book” or “money pump”argument – susceptible to being...

from Peter Radford Sorting out my old bookshelves I came across an old Isaiah Berlin Essay “The Pursuit of the Ideal”.  At the risk of being boring here is a very long extract, he begins the essay this way: “There are, in my view, two factors that, above all others, have shaped human history in this century.  One is the development of the natural sciences and technology, certainly the greatest success story of our time — to this, great and mounting attention has been paid from all...

from Lars Syll Causality in social sciences can never solely be a question of statistical inference. Causality entails more than predictability, and to really in depth explain social phenomena require theory. The analysis of variation can never in itself reveal how these variations are brought about. First when we are able to tie actions, processes or structures to the statistical relations detected, can we say that we are getting at relevant explanations of causation. Most facts have...

from Asad Zaman Introduction: In a previous lecture, we gave a New Definition of Probability. In this lecture, we will show how this definition enables us to resolve the massive amount of controversy which surrounds an apparently simple probability puzzle, known as the Monty-Hall problem. The book The Power of Logical Thinking, quotes cognitive psychologist Massimo Piattelli Palmarini: “No other statistical puzzle comes so close to fooling all the people all the time [and] even Nobel...

from Jayati Ghosh The World Health Organization appointed economist Mariana Mazzucato to head its Council on the Economics of Health for All in 2020. She is one of the architects of the biggest international research-funding scheme in the world, Horizon Europe, which launched this month. Her book Mission Economy is a timely and optimistic vision of how to fix the world’s “wicked problems” through directed public and private investment. In two brilliant and accessible books published over...

Intellectual property like pharmaceutical patents is part of the story of why so many people face a long wait for COVID-19 vaccines says Dean Baker discussing the high cost of policy choices that make the rich richer at public expense. GPEnewsdocs

from Dean Baker – the ways in which the economy has been structured to redistribute income upward It’s hard not to be appalled and scared by the reality denial of Donald Trump’s followers. Their willingness to insist an election was stolen, with no evidence whatsoever, is difficult to understand for those of who like to think that people respond to facts and logic. I don’t have any easy answers to get these people to start thinking clearly, but I will point out that it is not just...

from Lars Syll Much of current academic teaching and research has been criticized for its lack of relevance, that is, of immediate practical impact … I submit that the consistently indifferent performance in practical applications is in fact a symptom of a fundamental imbalance in the present state of our discipline. The weak and all too slowly growing empirical foundation clearly cannot support the proliferating superstructure of pure, or should I say, speculative economic theory …...

from Dean Baker I have repeatedly raised the point that media accounts routinely use the term “free trade” when they can more accurately say simply “trade” or trade policy. It is amazing to me that this practice continues. We saw it yet again in a NYT article on how many Republicans continue to be faithful to Trump even after last week’s coup attempt. The article told readers: “Anthony Sabatini, a Florida state representative, described Ms. Cheney and other Republicans who voted for...